5 Reasons Why Investing In Property May Not Be Right For You

There are plenty of reasons why investing in property is a good idea, but it may not be for everyone. If this is something you are interested in, you have no doubt heard of the benefits, such as a passive income, but it pays to wise up before you take the plunge into the real estate market. No matter how good you are at Monopoly, you need to remember you are paying with your own money here. So before you come to any rash decisions, we have listed five reasons why property investment may not be right for you.1. You don’t have the moneyWhen buying property, you will need to pay between 5 and 10% of the overall cost as a deposit. Then there will be the monthly mortgage payments to consider. If you’re buying property to rent, you may start making money back quite quickly, but there is no guarantee. You should take a long hard look at your finances before buying, and if you feel it’s a risky proposition at this stage in your life, you may need to put your plans on hold. You might choose to invest in shares instead, which can still be beneficial to you financially, but doesn’t require a huge fee upfront or ongoing costs to consider.2. You don’t know much about the property marketThere is a lot more to property investment than choosing a house and buying one. You need to commit to research or speak to planning consultants who have a more detailed knowledge of the market than you do. A little knowledge is everything, and you want to buy the right property at the right time, without falling victim to a housing crash.3. You struggle with financesYou may have money in your bank, but if you’re somebody who struggles to manage your finances, you may run into difficulty. If you are spending more than you earn, for example, you need to get a handle on your own finances before dealing with property investment. There are various financial implications you need to be ready for, such as property taxes, so budgeting is everything. Get money management advice from your local bank or a financial advisor, and put your personal finances in order before you take on the extra duress of managing a property.4. You don’t want to get into debtIn short, you are going to get into debt when you invest in property. Unless you have won big on the lottery, you will need to get a loan from your bank. You should always shop around for the lowest interest rates, but your payments may fluctuate unless you get a fixed-rate mortgage. So, if debt scares you, don’t invest in property, as simple as that. There are other ways to invest your money, and you don’t have to get into debt on some of them.5. You want to get rich quickMany people invest in property to get rich quick, but this is unlikely. Experts say most property investors only become financially free after around 30 years, so you will need to be patient. Yes, you can build up a sizeable income, but some of that will be spent on loan payments and ongoing payments to the property. Therefore, you may need to put off buying that fancy sports car you have been eyeing up, until you have achieved success.Bottom lineProperty can be a great investment, so we don’t want to put you off. However, it pays to take stock of your life before jumping in. Good luck in your decisions.